UPDATE: Canaccord Genuity Downgrades PayPal (PYPL) to Hold
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(Updated - September 19, 2016 11:05 AM EDT)
Canaccord Genuity downgraded PayPal (NASDAQ: PYPL) from Buy to Hold with a price target of $40.00 (from $45.00). Analyst Michael Graham thinks shares reflect TPV strength.
The analyst explained, "After a sharp decline following news of the Visa deal in July, PayPal's stock is up ~9% off of lows. We are optimistic regarding TPV growth in the near term, but we believe the factors driving this (One Touch, Venmo) are well understood and largely reflected in estimates. Meanwhile, higher funding mix-driven transaction expenses stemming from the V and MA deals are likely to pressure margins and temper EPS growth modestly. Longer term, we see a balance of factors (offline volume potential, competition from Apple & Android Pay) that should keep TPV growth on a path of gentle deceleration. With the multiple now at a less attractive level and the possibility of pressure on EPS estimates from 2017-2020, we believe shares are fully valued at current levels; therefore, we downgrade to HOLD."
Shares of PayPal closed at $40.70 yesterday.
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